Transformational Leadership Theory and Your Business

If you are in business for yourself, you may think that Transformational Leadership Theory has no bearing on the way you work or your resulting business performance. Hopefully after reading this article you will have new insight into ways this modern approach to business leadership can in fact hold great practical benefit for your company.

By using this leadership approach within your company, you are likely to find that staff feel a greater personal commitment to the success of the company. They will be more creative and proactive in resolving issues before they develop into problems, and will feel internally motivated to create the best outcomes they can contribute to within their position.

What entrepreneur doesn’t want a team around them who is as committed to their vision as they themselves are, and contributing a diversity of viewpoints, skill sets, and life experiences toward that end? Transformational leadership theory is not a dry set of theorems directed at university professors. If you will apply yourself to learning it and implementing it within your own leadership style, you will see payoffs that may surprise you… and with the same staff you have now.

What is Transformational Leadership Theory?

So what is transformational leadership? The chief characteristic of transformational leadership theory is that it describes a way of leading that is collaborative in nature. Instead of the boss deciding unilaterally what changes are needed and how they will be implemented, this knowledge is essentially “crowd-sourced.” The team then works together to create the desired results, with each team member feeling any success achieved will be a personal success, as well as a company success.

Don’t let the use of the word “crowd” lead you to think I mean some amorphous mass of people. To the contrary, within transformational leadership theory there is increased focus on the uniqueness of each individual. You hire for company fit and then shape the position to fit the person’s strengths and weaknesses, rather than hiring for specific skill sets as if people were interchangeable.

An inspiring vision that ignites the passions and imagination of the team is also vital to the successful implementation of transformational leadership theory in the workplace. This interview with prolific founder and philanthropist, Rob Schwartz, elucidates this point.

A Working Transformational Leadership Definition

We have to speak of transformational leadership theory in terms of characteristics, because the reality is that by its very nature it is a custom application. A working definition is as close as we can come to an actual transformational leadership definition. It is forever a work in progress, shaped by the experiences of the people who apply the theory in practice.

Here is a definition for you to start with, and then adapt as you learn from your own company’s experience: (Please come back and share your own version of your working definition as it evolves.)

“Transformational leadership occurs when one or more persons engage with others in such a way that leaders and followers raise one another to higher levels of motivation and morality.” – James MacGregor Burns, founder of Transformational Leadership Theory

As you can see, that definition leaves a lot of room for interpretation.

Developing Your Own Transformational Leadership Style

A theory is only as good as the results of its application. Let’s now consider what the application of transformational leadership theory within your business might actually look like in practice. What might you do differently?

Transformational leadership is collaborative, not transactional. That means that instead of motivating employees with a salary increase you might motivate them by setting a good example of commitment to the work team in your own behavior, appreciating their need to take care of family commitments, for example, and demonstrating that you value their ideas enough to have formal systems for collecting, evaluating, and then implementing those contributions.

Is there any change you might make at your company to put less emphasis on “give and take” and more on human-to human support for a shared success? What might make your workplace feel more like a family home, and less like a banking center?

Another aspect of transformational leadership theory is that the company is directly invested in the personal and life development of each employee. The employee is seen as a human being on a path of growth and development, and the company values that personal trajectory for each employee.

How might your company invest in the development of each person who works there?

Transformational leadership theory values the way employees are impacted by the leadership style of the employer. Do your employees respect, admire, and trust you? Do they treat you like someone they are confident cares about them, or do you find yourself often having to reassure them, or them reacting with surprise when you reward them in any way or don’t criticize a mistake? If they are surprised by humane treatment, that’s a sure sign that more attention is needed to this element of your transformational leadership style.